Roundhill Investments Launches Esports ETF

- June 4th, 2019

The ETF will have a 0.25 percent expense ratio in the first year and zero trading fees. It will track a range of esports-related stocks.

On Tuesday (June 4), Roundhill Investments announced the launch of its esports exchange-traded fund (ETF), the Roundhill BITKRAFT Esports & Digital Entertainment ETF (ARCA:NERD).

The esports industry has grown significantly in recent years. According to Newzoo, the gaming space is anticipated to reach US$180.1 billion in revenues by 2021. Esports and competitive play are further propelling revenues.

A 2018 EEDAR gaming segmentation report shows that two in three people in the US play video games. Meanwhile, a separate Newzoo report shows there are 454 million esports viewers around the world.

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Roundhill Investments, based in New York and San Francisco, launched its rules-based Roundhill BITKRAFT Esports Index in conjunction with its ETF.

The ETF is made up of an equally weighted portfolio of esports-related companies from around the world. Companies range from hardware developers to video game publishers, plus video game tournament operators and streaming network companies.

“Together with the Roundhill team we are taking an important step forward in making esports more easily accessible on the public financial markets,” Jens Hilgers, founding partner at BITKRAFT Esports Ventures, said in a release.

“The Roundhill BITKRAFT Esports and Digital Entertainment ETF enables institutional investors as well as individuals to participate in the long-term growth of esports and the underlying entertainment trends.”

The Roundhill BITKRAFT Esports & Digital Entertainment ETF’s expense ratio will be 0.25 percent for the first year, with no trading fees. After the first year, the expense ratio will increase to 0.5 percent.

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As of Tuesday, the ETF was tracking 24 holdings with a median market cap of US$4.6 billion.

Among the top 10 holdings are South Korea’s AfreecaTV (KOSDAQ:067160) with a 8.24 percent weighting, Singapore’s Sea (NYSE:SE) at 7.47 percent, Activision Blizzard (NASDAQ:ATVI) at 5.95 percent and Take Two Interactive Software (NASDAQ GS:TTSI) at 4.73 percent weight on the ETF.

“In 2018, more than 600,000 fans tuned in to watch Ninja and Drake battle enemy squads, while earlier this year, 10 million attended an in-game Marshmello concert,” Tim Maloney, chief investment officer of Round Hill Investments, said in the announcement.

Roundhill Investments focuses on ETF products while providing advising services that are directed at both retail and institutional investors. It has partnered with industry experts, including esports entrepreneur Jens Hilgers, founder of Infinite Sports Chris Chaney and journalist Rob Zacny.

BITKRAFT, the first esports investment fund worldwide, is a stakeholder in Roundhill Investments.

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Securities Disclosure: I, Dorothy Neufeld, hold no direct investment interest in any company mentioned in this article.

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